You may be familiar with Canadian Business magazine’s exclusive annual ranking of the country’s best and worst corporate boards. Of course, as the magazine editors admit, one can only speculate on what goes on behind the closed doors of Canada’s boardrooms. But there are more clues coming forth in the form of compensation practices.
While the Canadian Business ranking offers marks for the quantity and quality of executive compensation information boards disclose, the Entrepreneurial Boards Composition and Compensation Survey: The Canada Report builds on past studies to offer new insights into the boards of small, young companies from a different perspective: diversity, size, vacancies and remuneration strategies.
Richard Leblanc, an assistant professor of governance, law and ethics at York University who has been studying boards for more than a decade, told Canadian Business magazine that companies have spent a lot of time, energy and money putting in place board structures that are supposed to lead to better corporate governance. But the evidence shows that those structures alone do not create better boards. “We have a lot of boards in Canada that look good on paper but are still not adding a lot of value to their respective company,” he said. “Companies that want a really good and effective board have to go beyond the structural guidelines.”
Leblanc is correct. The Entrepreneurial Boards Composition and Compensation Survey: The Canada Report hopes to take Canadian companies one step closer to understanding what makes a “really good and effective board” by offering insights into how companies are organizing their boards and compensating their directors. The study goes beyond corporate governance best practices. The study looks at how small Canadian companies are truly operating, and determines where there may be room for improvement.
Part of a Canadian board’s ability to help a company compete in a global marketplace depends on a board of directors that is not only competent, but forward-thinking. The Entrepreneurial Boards Composition and Compensation Survey: The Canada Report seeks to shed light on the state of boards in the nation. By understanding and employing best practices for board size, diversity and compensation, among other characteristics, Canadian companies can continue to gain ground in international business.